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Housing Starts and Permits Swing to More New Lows For This Cycle

It's another new set of housing lows with single-family starts leading the way down.
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Seasonally-adjusted, annualized (SAAR) housing data from commerce department, chart by Mish

Seasonally-adjusted, annualized (SAAR) housing data from commerce department, chart by Mish

The Commerce Department's New Residential Construction Report shows housing starts and permits drifting lower.  

Building Permits 

  • Privately‐owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,526,000. 
  • This is 2.4 percent below the revised September rate of 1,564,000 and is 10.1 percent below the October 2021 rate of 1,698,000. 
  • Single‐family authorizations in October were at a rate of 839,000; this is 3.6 percent below the revised September figure of 870,000. 
  • Authorizations of units in buildings with five units or more were at a rate of 633,000 in October. 

Housing Starts 

  • Privately‐owned housing starts in October were at a seasonally adjusted annual rate of 1,425,000. This is 4.2 percent (±12.7 percent) below the revised September estimate of 1,488,000 and is 8.8 percent (±12.7 percent) below the October 2021 rate of 1,563,000. 
  • Single‐family housing starts in October were at a rate of 855,000; this is 6.1 percent (±13.4 percent)* below the revised September figure of 911,000. 
  • The October rate for units in buildings with five units or more was 556,000. 

Housing Completions 

  • Privately‐owned housing completions in October were at a seasonally adjusted annual rate of 1,339,000. 
  • This is 6.4 percent (±10.6 percent)* below the revised September estimate of 1,431,000, but is 6.6 percent (±12.6 percent)* above the October 2021 rate of 1,256,000. 
  • Single‐family housing completions in October were at a rate of 961,000; this is 8.3 percent (±8.2 percent) below the revised September rate of 1,048,000. 
  • The October rate for units in buildings with five units or more was 362,000.  

Unadjusted Starts, Permits, Completions 

Unadjusted housing data from commerce department, chart by Mish

Unadjusted housing data from commerce department, chart by Mish

The SAAR numbers have a way of making numbers look much bigger than they are.

The above chart shows there were 121,000 starts in September vs the headline number of 1.425 million. 

Housing Starts Single Family vs Multi-Family 

Seasonally-adjusted, annualized (SAAR) housing starts from commerce department, chart by Mish

Seasonally-adjusted, annualized (SAAR) housing starts from commerce department, chart by Mish

Key Points

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  • Single-family starts have declined to 855,000 SAAR. That's the lowest since 750,000 in May of 2020.
  • Starts have been lower that the pre-covid rate for four consecutive months.
  • Single-family starts have been lower that the pre-covid rate for five consecutive months.
  • A year ago multi-family starts were 484,000 SAAR. Now they are 570,000. That's an increase of 17.77%. 
  • A year ago single-family starts were 1,079,000 SAAR. Now they are 855,000. That's a decline of 21.22%. 

Comments on the Fed

  • The Fed actively created a housing bubble a second time, by holding interest rates too low, to long again.
  • The Fed added mortgages to its balance sheet all the way to March of 2022 despite surging inflation.

US Treasury Yield Curve Is One of the Most Inverted in History

Please note the US Treasury Yield Curve Is One of the Most Inverted in History

This is a strong recession signal. 

The Fed actively seeks to pop the housing bubble that it created. Given policy acts with a lag, the Fed is likely to overshoot with a policy error in the opposite direction.

Is this anyway to run a country or a business?

This post originated at MishTalk.Com.

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